Shaping The Future of Employment In The New Era of Digital Technology

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Transcription:

Shaping The Future of Employment In The New Era of Digital Technology Director of Labor and Employment Creation Ministry Of National Development Planning/Bappenas Jakarta, 19 July 2018

Million Worker INDONESIA ALREADY FACING THE LABOR STRUCTURAL TRANSFORMATION 2 100% Proportion of Labor based on 17 sectors and Formal Informal Status Groeth of labor 2014 2015 2016 2017 4 2017 2016 2015 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 11% 11% 13% 59% 65% 55% 65% 59% 69% 89% 88% 92% 46% 45% 34% 44% 34% 64% 41% 34% 42% 34% 55% 43% 34% 45% 36% 71% 72% 98% 98% 84% 98% 77% 80% 79% 76% 74% 79% 100% 98% 90% 100% 98% 94% 100% 98% 91% 57% 65% 55% 3 2 1 0-1 0,67 2,16 0,60 0,65 2,62 0,32 1,80 1,22 0,08 0,57 0,83 0,11-0,39-0,39-1,48-1,67-2 2015 Formal 2015 Informal 2016 Formal 2016 Informal 2017 Formal 2017 Informal The service sector proved able to absorb the formal workforce. The high proportion of formal service sector workers is one of them due to the rapid development of the digital economy that provide alternative formal employment opportunities. It is also indicated as a result of the rapid development of the digital economy that provide alternative formal employment opportunities, such as courier services and online transport and trade services. -3 1 2 3 4 5 6 7 8 9 10 11 12 Pertanian Formal Industri Pengolahan Formal Jasa & Lainnya Formal Pertanian Informal Industri Pengolahan Informal Jasa & Lainnya Informal Sumber: Sakernas periode Agustus

POTENTIAL OF DIGITAL ECONOMY IN INDONESIA 3 Rapid Development of Digital Economy in Indonesia Internet users in Indonesia keep increasing 2013 71,2 million 2014 2015 88,1 million 93,4 million 70% searching for online shopping information (2015) 7,4 million online shoppers with 79,8% individual buyer (2015) Transaction value up to US$3,5 miliar (2015) with the most popular one (Clothes: 67,1%) The Internet s Effects on SMEs (2016 - Projection) 95% 87% 16% 14% 7% 69% High-Web Medium-Web Low-Web and No-Web Historical Three-Year Sales Growth of SMEs Percentage of SMEs that added jobs during the last three years Source: Boston Consulting Group, 2012 12,0 10,0 8,0 6,0 4,0 2,0 0,0 Top 10 Countries with Highest Internet User China India United States Brazil Indonesia Japan Russia Nigeria Germany Mexico 139,1 132,7 118,4 104,5 93,6 71,7 69,9 236,9 462,1 Million internet users E-commerce Retail Transaction Value in Indonesia 2013-2018 E-retail Sales (in billion USD) Notes: *projection e-marketer, 2015 Source: Central Bank of Indonesia & Ministry of Communication and Information, processed 731,4 Source: Internet World Stats, March 31 2017 0 100 200 300 400 500 600 700 800 1,8 2,6 3,5 5,3 8,2 10,9 2013 2014 2015 2016* 2017* 2018*

DIGITAL ECONOMY LANDSCAPE 4 FINANCIAL TECHNOLOGY (FINTECH) ON DEMAND SERVICES Transaction projection 2016 US$ billion (Rp190 trillion) Transaction nominal per individual 2014 14,5 US$ 56,98 Players (Rp747.000) DIGITAL ECONOMY LANDSCAPE Digital economy has the potential to reach US$130 billion by 2020. High market demand 132,7 million 63,4 million Internet users Smart phone users Players E-COMMERCE INTERNET OF THINGS (IOT) Transaction potentials 2013 2016 US$ 8 billion US$ 20 billion (Rp104 trillion) (Rp261 trillion) Players 2020 US$ 130 billion (Rp1.700 trillion) Asia Pacific market potentials 2015 US$ Players 250 billion 2020 US$ 583 billion Source: IDEA, 2017

DIGITAL ECONOMY: GROWTH AND POTENTIALS 5 GDP 2017 Annual ICT sector grows more than 9% and continues to do so for the last 2 years. Transportation and warehousing sector also grows fast, i.e. 8%, which indicates the growth of start-up e-commerce and transportation, such as Gojek, Grab, Uber. FinTech industry grows positively. There are 184 FinTech companies; 42% are payment-based FinTech companies, 18% are loan-based, and others are aggregators and crowdfunding. In 2016, revenue of e-commerce amounted to USD 6 billion, and 78% of current Internet users made online purchases. E-commerce is expected to grow by approximately 18% p.a. in the next five years, reaching a market volume of USD 16.4 billion by the end of 2020.

DIGITAL ECONOMY HAS POTENTIALS: ON GROWTH AND JOB CREATION 6 McKinsey (2016) estimates that digital technology will able to create 3,7 million jobs by transforming informal jobs, employing inactive population, and reducing unemployment. It will also increase Indonesia s GDP by USD35 billion in 2025. Digitalization Automation Artificial Intelligence Job lost unmployment Technology encourages the creation of new, more productive and larger amounts of new jobs 49% AGRICULTURE, FORESTRY, FISHERY, HUNTING 65% PROCESSING/ MANUFACTURING 53% RETAIL TRADE 45% CONSTRUCTION 64% TRANSPORTATION AND WAREHOUSE Potential automation by sector Potential automation By occupation FARMERS, FISHERS, BREEDERS, HANDICRAFT WORKERS TAILOR, STATIONERY MACHINE OPERATOR, LAS & SOLDER SALES, CASHIER, TICKETS Sumber: EMSI; Oxford Economic Forecasting; US Bureau of Labor Statistics; McKinsey analysis, Future of Jobs Report, WEF CONSTRUCTION WORKER, BLACKSMITH ADMINISTRATION WORKER, WAREHOUSE CLERK, etc

POSITION OF INDONESIA IN THE GLOBAL COMPETITIVENESS RANK (1/2) Indonesia still left behind for: labor market efficiency pillar. From the 137 nations, Indonesia is at 96th position. 7 Labor Market Efficiency Ranking Indonesia s competitiveness pillar Singapura Malaysia Laos Brunei Kamboja Vietnam Thailand Filipina Indonesia 2 26 36 47 48 57 65 84 96 0 50 100 150 Source: Global Competitiveness Report, World Economic Forum, 2017-2018

POSITION OF INDONESIA IN THE GLOBAL COMPETITIVENESS RANK (2/2) 8 Cooperation in labor-employer relations Flexibility of wage determination Singapura Malaysia Filipina Thailand Brunei Indonesia Laos Kamodia Vietnam 2 20 33 36 39 41 51 67 85 2017-2018 2016-2017 Singapura Brunei Malaysia Laos Vietnam Filipina Indonesia Kamodia Thailand 5 27 31 61 81 86 99 100 103 2017-2018 2016-2017 0 20 40 60 80 100 0 20 40 60 80 100 120 Women in Labor Force, Ratio to Men Hiring and firing practices Laos Vietnam Kamodia Thailand Singapura Brunei Malaysia Filipina Indonesia 4 24 45 65 73 95 101 102 113 2017-2018 2016-2017 Singapura Malaysia Indonesia Thailand Kamodia Vietnam Laos Brunei Filipina 3 11 25 30 32 49 56 61 77 2017-2018 2016-2017 0 50 100 150 Source: Global Competitiveness Report, World Economic Forum, 2017-2018 0 20 40 60 80 100

CHALLENGES & GOVERNMENT ACTIONS ON DIGITAL ECONOMY 9 Reduce Digital Gap Improve Human Resources Capability Formulate Suitable Regulation and Incentive Economic Connectivity, including Palapa Ring Project, Pipa Bersama and Wireless Connectivity Pilot Project for Rural Area Government Connectivity in the form of Integrated Government Network and Data Center Development of Human Resources and National ICT Industry e.g. through establishment of an innovation development center: Nongsa Digital Park (NDP) in Batam for creative digital industry players Improving skills of workers Creating new jobs by promoting technology-based entrepreneurship Improving employment social protection Presidential Decree No. 74/2017 on e-commerce Road Map 2017-2019 Tax incentives for start-up and venture capital (KMK No. 1251/ 1988 and KMK No. 250/1995)

FUTURE OF JOBS 10 70% 60% 50% 40% 30% 20% 10% 0% Labor Projection by Sector 2015 2025 2030 2045 Agriculture Manufacturing Industry Services Source: Bappenas Calculation, 2017 64,20% 21,30% 14,60% 100% 80% 60% 40% 20% 0% Labor Projection by Education 20% 70% 10% 2015 2030 2045 Low Middle High Soft Skills Complex problemsolving Critical thinking Creativity People management Emotional intelligence Judgment and decision-making Service orientation Negotiation Coordinating with Cognitive flexibility others Source: Future of Jobs Report, WEF Notes: Low: SMP and below; Middle: SMA/SMK & Diploma; High: University Technical skills Computer and Mathematics Architecture Engineering (Science, Technology, Engineering, Mathematics) STEM Labor with middle-high education will reach 90%, based on Vision 2045 projection. The required annual growth of labor with university education is 3,7% (McKinsey, 2012) or around 700,000 p.a. Service sector will continue to grow and reach 64,2% in 2045.

IMPROVING SKILLED WORKERS: STRATEGIC POLICIES 11 1 To enhance the training curricula for improving soft skills and hard skills Tech improves labour productivity 3 2 To promote competency-based vocational training and apprenticeship program To improve the qualification, requirement and the operation of professional certification institutions across the country Tech creates more productive and larger amounts of new jobs with higher income Tech improves access of MSMEs to finance Tech widens the inclusivity of decent jobs opportunities JOB CREATION INFORMATION & TECHNOLOGY IMPACT ON SDGS

STRATEGIES: WHAT SHOULD BE DONE? 12 Improving skills of workers: 1. New automation-supporting skills; 2. Human-specific skills (soft skills, logical thinking, coaching, problem solving, creativity, etc.); 3. Improvement of education, with emphasis on STEM and soft skills; 4. Facilitation of retraining and income benefits. Creating new jobs by promoting technology-based entrepreneurship. Improving social protection scheme, coverage and deliveries. Facilitating knowledge transfer from high-skilled expatriates. Promoting more flexible labor market by improving labor regulation, quality of labor market information, and TVET system.

THANK YOU.